Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Orphan Stocks

What it is:

Orphan stocks is a colloquial term for stocks that analysts and investors seem to disregard.

How it works (Example):

Orphan stocks are stocks that investors and analysts tend to ignore. Also known as wallflowers, orphan stocks usually are not outstanding market performers, but occasionally the reasons for a stock being called an orphan stock may not be apparent.

Why it Matters:

Value investors sometimes exclusively search for orphan stocks. Because their stock prices have not been overblown by investor demand, orphan stocks often have low P/E ratios, which many investors see as an indicator for solid long-term returns.